The United States has started collecting a new 10% tariff on imports. Higher duties on goods from 57 major trading partners are set to follow in the coming days.
The policy, introduced by former President Donald Trump, came into effect at 12:01 a.m. Eastern Time (04:01 GMT) on Saturday. US customs officials at ports, airports and warehouses began enforcing the so-called “baseline” tariff. This marks a clear shift away from the traditional post-WWII system of negotiated trade rates.
Kelly Ann Shaw, a trade lawyer at Hogan Lovells and former White House adviser, described the move as a major moment in global trade. Speaking at a Brookings Institution event, she said the policy would likely develop as countries negotiate better terms. “This is a fundamental shift in how the United States trades with the world,” she explained.
Markets reacted strongly to the announcement. The S&P 500 index lost $5 trillion in value over two days – a record drop. Oil and commodity prices also declined. Investors sought safer assets, turning to government bonds due to rising concerns about a possible recession.
A widening scope of tariff
The first group of countries affected includes Australia, the United Kingdom, Brazil, Colombia, Argentina and Saudi Arabia. This applies even though several of them had trade deficits with the US last year. US officials argue that, with fairer trade policies, those deficits might look different.
US Customs and Border Protection confirmed a grace period for goods already in transit. Shipments that left before the deadline can avoid the 10% tariff if they arrive by 27 May.
More tariffs are set to take effect next Wednesday. Rates will range from 11% to 50%. The European Union will face a 20% tariff, while Chinese goods will see a 34% charge. This will bring the total tariffs on Chinese imports to 54%.
In response, China announced its own set of measures. These include a 34% tariff on US goods and export restrictions on rare earth minerals. “The market has responded to the US action,” a spokesperson from Beijing said.
Trump defended the move on social media, calling it an “economic revolution.” He encouraged Americans to “hang tough,” saying the long-term results would be worth it. Later that day, he was spotted at his Florida golf club reading coverage of the market response and China’s countermeasures.
Global leaders react
French President Emmanuel Macron urged nations to remain united. He said a trade war would help no one and called for coordinated action to protect businesses and citizens.
In the UK, Prime Minister Keir Starmer said he was prepared to support British industry. Writing in The Telegraph, he stressed the need to secure a trade deal with the US that might include tariff exemptions.
Israeli Prime Minister Benjamin Netanyahu plans to visit Washington to discuss the 17% tariff on Israeli products. Japanese media reported that Prime Minister Shigeru Ishiba is seeking a call with Trump to address Japan’s 24% levy.
Negotiations and strategic responses
Vietnam has agreed to enter talks after the US imposed a 46% tariff on Vietnamese imports. The country had previously benefited from supply chain shifts during Trump’s earlier trade actions against China.
In Taiwan, President Lai Ching-te met with technology leaders to plan a response to the 32% tariff. A senior security official also travelled to Washington for related discussions.
Italy’s Economy Minister Giancarlo Giorgetti warned against retaliatory tariffs. Speaking at a forum near Milan, he said such action could do more harm than good.
Speaking via video at a political event in Italy, Elon Musk shared his view on global trade. He said he hoped to see complete trade freedom between the US and Europe, calling for “zero tariffs.”
Although Canada and Mexico are exempt from these new tariffs, they still face a 25% charge on goods that fail to meet trade agreement standards.
The US has excluded around 1,000 product categories from the latest tariffs. These include pharmaceuticals, uranium and semiconductors. However, officials are considering whether to impose duties on some of these items in future.
